Incipient Ropes In Another $10M

Virtualization startup tops off second round but still won't say exactly what it's doing

September 30, 2003

2 Min Read
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Storage virtualization software startup Incipient Inc. said today that its investors have topped off its Series B funding round with an additional $10 million, upping the company's second round to $25 million (see Incipient Raises $10M More and Incipient Raises $15M Series B).

New investor HLM Venture Partners led the latest round, which brings Incipients total funding to date to $35 million. Another new investor, Essex Investment Management Co. LLC, along with all of the startup's existing investors -- including Greylock, Globespan Capital Partners, and Sigma Partners -- also participated in the round.

“This is a complete homerun for us,” says Edward Durkin, who was recently named Incipient’s CFO (see Incipient Appoints CFO). “We think it’s a great validation of the progress we’re making... The company is very well funded and capitalized right now.”

The Waltham, Mass.-based startup will use the additional funds to expand its sales, marketing, and product development efforts, with plans to augment its staff of about 60 employees, Durkin says.

While VC funding has been picking up for storage startups in recent months, raising a B-round of $25 million is quite an accomplishment for any software startup, and especially for one that has yet to completely reveal what it’s working on, or even officially name its product (see The Billion-Dollar Slump and Incipient Is Latent).Even more impressive is Durkin’s claim that the latest investment was an up round for Incipient, and that it should be enough to get the company to cash-flow positive. He declined, however, to say when exactly that might be.

The startup has revealed that it is working on some kind of storage provisioning and virtualization software that can reside either on a switch or a storage array. While Durkin acknowledges that some storage vendors and a number of startups offer portions of what the company’s software does, he claims that Incipient is the first to merge virtualization, provisioning, and end-to-end management into a single software product. “We think we’re very unique,” he says. [Ed. note: Not just unique. Very unique.]

Incipient, which hopes to sell its software through OEMs, says it is currently talking with all the switch vendors, and has already signed up with Brocade Communications Systems Inc. (Nasdaq: BRCD) as a partner (see Brocade Reupholsters Rhapsody).

Durkin says the heavy development portion of the process is complete, and that the company expects to officially push the product from its incipient state to full, palpable substantiality close to the end of this year. “We’ve made a lot of great progress on the product side,” he says.

— Eugénie Larson, Senior Editor, Byte and Switch

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